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December 18, 2008

Obama's Schapiro selection already facing scrutiny

Obama's selection of Mary Schapiro to head the Securities and Exchange Commission is already coming under fire. Wall Street Journal political reporter T.W. Farnum, claims Schapiro has "crossed paths" with family members of fraudster Bernard Madoff through her career at the head of securities-industry bodies.

Farnum writes: "Madoff and members of his family were active for decades in the National Association of Securities Dealers, which Ms. Schapiro led. His firm was instrumental in founding the Nasdaq stock market created by the association, which merged with the enforcement and regulation arms of the New York Stock Exchange to form the Financial Industry Regulatory Authority last year. Ms. Schapiro now heads Finra.

Madoff was chairman of the board of Nasdaq from 1990 to 1993. Schapiro joined the NASD in 1996.

Both of Bernard Madoff's sons, Andrew and Mark, served on one of the NASD's district committees. In 2004, Mark Madoff was appointed to a mutual-fund task force. He had previously been a member of the National Adjudicatory Council for several years."

For Farnum's full story, "SEC Nominee Has Madoff Connection," go to blogs.wsj.com.